Women's Guide to the Economy
"Poor people don't work hard like 'we' do," "If I can balance my checkbook, why can't the government?" "The Dow is going up, the economy must be going good!" These notions are among the strands that weave a web of justification for our economic order -- and it seems like more and more of those with political clout really believe them. But there are no justifications for an economy in which 20 percent of our children grow up in poverty and in which inequality continues to widen. What's a woman to do? Can we non economists really understand enough about the Dow and the national budget to challenge the experts who direct the economy for the benefit of a few. Yes! As a non economist who coedits a progressive economics magazine, I've learned that this economics stuff is not so hard once you get the hang of it. Other women are learning the same thing in grassroots education projects, where, in good feminist fashion, they share their insights and learn with the help of other "amateurs." The Women's Budget Project is one example. The AFL-CIOs new economic education project is another. (at least some of the 40 percent of union members who are women must be participating!)Economics education has some of the feeling of consciousness raising (c-r), as we learn to articulate more clearly in words that we knew deep down but could not really say before. And just like consciousness raising, the more we learn, the further away we feel from what is taken as economic wisdom in the world at large. Here are a few random favorites from my own economics c-r experience. I'm interested in hearing what your would be.*The economy is not organized in a way that benefits families, especially families headed by women and people of color. More than half of poor families are headed by women -- it was just under half in 1976. The median income of white families is almost double that of Black families.*The economy does not value "women's work" now any more than it did before the women's movement. It neither allows enough time for "women's work" to be done in the home, nor does it pay a living wage to those providing "women's s work" in day care centers, delis, and restaurants. As a matter of fact, there is less time than ever for nurturing and home-based work as businesses rely more on temporary and contingent workers to cut costs and as more people take on a second job to make ends meat after 20 years of falling wages.*"If I can balance my checkbook, why can't the U.S. government?" This line -- spoken by many a GOP congressman during this spring's drive to pass a balanced budget amendment to the Constitution -- probably makes sense to folks who are having a hard time and are watching the government spend their tax money. Problem is, the economy -- and the government that manages the economy -- does not operate like a household. This was one of British economic john Maynard Keynes's most challenging insights in the 1930s -- it is god for individual households and even individual businesses to save, but it is not always good for the government to do so. For instance, government spending keeps the economy stable by keeping investment coming in a t a steady stream during a recession, when businesses and consumers tend to curtail their spending. When spending is curtailed, the economy slows down even more. But tax receipts also inevitably go dowel during a recession. and the government has to borrow to replace the decrease in revenue. Bedsides, households that can afford to into debt do so all the time to pay for homes and schooling. Why shouldn't' the government?*The economy does not operate like a small or even a large company writ large, as business man are wont to say. this is another of Keynes's insights: he distinguished between the microeconomics of a firm and the macroeconomics of the economy as a whole. One of the irrationalities of the economy that government regulation needs to deal with is that individual businesses act in ways that may be profitable, but that are bad for their workers, their fellow capitalits and the economy as a whole.*"Big government is bad for the economy." Per capita incomes have grown more in the era of big government -- form the 1930s through the 1970s -- than during the era of limited government that preceded it. Besides, big government directs investment in areas where the market does not want to go (like supporting children and "women's work").*There is no such thing as a "free market. To an economist,. a free market is one in which there is lots of competition.. But the US. Economy hasn't operated anywhere close to the at situation since the 19th century, when businesses were small. Then, as the chaos of forming new railroads and steel mills destroyed a few too many people's investments and livelihoods, businessmen created huge cartels and monopolies to stamp out competition and stabilize profits. Their offspring are today's multinational corporations, which all aspire to dominate their sector the way Microsoft dominates computers.*The Federal Reserve Bank may very well have more power to direct the economy than Congress or the President. It controls how much money is in circulation -- through the interest rates it charges banks for money, for example -- and it can take money out of circulation if its governors think the economy is getting "too hot." The governors associate a hot economy with inflation -- bad for investors -- but a hot economy also means lower unemployment and more jobs to go around*Even though we hear about how easy it is to invest in the stock market through mutual funds (you just put your money into a pool and let he investment house do the rest), most American's can't afford to use them. Seventy percent of American have no of few stocks. The top 10 percent of U.S. citizens own 86 percent of the stocks. Economic news in the papers is written with the wealthy and the upper-middle class in mind. We hear the regular message of how the Dow is doing on the radio -- but who really benefits? We read about the anguish of poverty -- but with no sign that there are alternatives. Once we learn to write our own more accurate economic news, I bet we can write a different future, despite the odds. But that's another story.